Cryptocurrency Trading Styles: Long-Term Investment AND Day Trading
We will talk about two of the ways you can do business exchanging Cryptocurrencies. Call it a formula or a style. Investing in Cryptocurrency and earning profits from them is the best thing you can do in today's time. It’s much better than any other form of investments such as: share markets, options trading, future trading, etc. The advantages of crypto trading includes: you can easily open an account at any exchange of your choice from your home or your work station without such hassle and can do it directly without the need for any third parties, and also do it with live price feeds, you don't need to pay any commissions to any broker or trading floor personnel.
There are so many online crypto exchanges, when choosing exchanges, please consider all possibilities and make your best choice, every exchange has some advantages and disadvantages, some has high fees while others offer low fees, I leave the decision to you. Personally I prefer BitShares as my favorite place for exchanging crypto-currencies, as it's completely decentralized and the exchange fees are as good as invisible. Recently I hear some exchanges will require user to verify their identity, I only hope they won't start selling user data :P
Long-term Investment:
Photo Source: http://www.in2013dollars.com/bitcoin-price
Long-term investment is the first mentioned. This is when you buy some crypto-currencies of your choice and hold it for a long time. You might have heard this word “HODL” if you are in this crypto space for a while. HODL is just a fancy way of saying “hold”. During the beginning it was a typo someone made while writing hold but then it became so popular that it is now used as a meaningful word.
Long-term investment means you buy crypto and then keep it in your wallet for a long time and then just wait till the market moves to a bullish trend and sell it at a much higher price. Usually long-term investors prefer to keep their investment till they can get a profit of more than 50% of what they have invested. In February 2017, the mean average price of Bitcoin was calculated at $987.35 while the mean average price in 2018 as of now is $9,052.58 so one can easily calculate the profit if you have invested in Bitcoin and hold your investment for a year or so. You can decide how long you want to keep your money invested, my advice is to check the price update regularly and take back your profit when the price gets higher than what you have invested, sometimes we want to wait more to have higher return but be careful as sometimes the price gets high and then fall down, its better then you have a reasonable profitability to pull out before other starts taking their market and exit as you keep waiting for more profit.
Volatility:
Day Trading:
This is the second method we will discuss today & using this style we can trade the same crypto for 20 or 50 times in just one day. All we have to do is buy a crypto currency and then sell it at a price which is slightly higher than what we bought it for, and then again buy it at a slightly lower price and keep repeating the cycle over and over again. This process needs constant monitoring of the price fluctuation during the day.
This is today's Bitcoin price chart which shows how many times the price moved up and down so far. And these type of ups and downs happen everyday and with every currency. If you observe the market for a while then with time, experience and the use of different tools, you as a trader will have the idea when to buy and when to sell and make profit on your purchases.
As for the rest I leave it to your choice and preference which is the best style for you, however its best to choose just one of these two styles, you either do a day trade or a long-term investment.
One last thing, the crypto market is open 24 hours a day, 7 days a week and 12 months a year. It is a global market and anyone in the globe can join and start trading, however, I have noticed something, the market may be open during weekends (Saturday & Sunday). However, the trades are slow, and usually the prices are down during the weekend. Perhaps people actually prefer to spend their weekend taking a break from all sorts of work and enjoy their days off, that's why the markets are usually like this during the weekend, but then again if you want to trade you are free to do so, and usually what I do is I try to buy as much as I can on Sunday and always sell them on Monday and earn good profits.
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Cool Post. Since you got the bitcoin tag do you have a prediction for Bitcoin over the next few days? Also followed you for future posts :)
I'm expecting $11,500 this week
problem with day trading is that you need to know what you are doing, as you can do well in 20 trades and then make a mistake and void all the gains or worse.
long term investment is easier - you buy something that has potential and is at the right point price wise, then you just hodl :)
good post, thanks!
Both these options have their own advantages and disadvantages.. as I mentioned before, it depends on the person which choice is best for them